Analysis Advice......

[Corey Woodruff]

I am currently about to make my first buy. My criteria is under 40k and im going to buy and fix up a bit and rent for cash flow. My major concern going into this is how to know which houses are good deals what are the major things you look for when buying a house with plans to rent. I live in michigan in an area where you can get a nice house for 40k. but some of the ones for 20k that need work im just scared to pull the trigger on. Is it as easy as bringing a contractor with me and having him tell me the repair cost of getting it "rent ready"  Any advice on this would help greatly and be very appreciated!

[Joel Sherlock]

@Corey Woodruff I always recommend prior to closing on any deal know all of the competition in the area and market. Its always important to know what level you need to bring the home up to in order to be just slightly nicer then the others in the area.

For example: Do you need hardwood or will laminate be more then enough. Is granite in the kitchen and bath needed or an unnecessary luxury for the market. This will always vary market to market. I have seen many first timers take properties to far and blow budgets because they were excited to make the home "perfect"

Once you have a firm understanding of what level a home needs to be complete and competitive (this applies to rentals or re sales) only then can you work backwards from the estimated finished market value, less the renos you would need to bring it up to par and if there is enough money between that number and the purchase price then its a go.

Cheers

Joel